Under present law, an out-of-state person making sales in Tennessee, who cannot be required to register for sales and use tax under applicable law, but who nevertheless voluntarily registers to collect and remit use tax on items of tangible personal property sold to Tennessee customers, is allowed, for the purpose of compensating such person in accounting for and remitting the tax, a deduction against taxes due, reported, and paid to the department as follows: (1) 2 percent of the first $2,500 on each report; and (2) 1.15 percent of amounts over $2,500 on each report. Under present law, a Model 1 seller under the Streamlined Sales and Use Tax Agreement is not entitled to the vendor's compensation described above. Also under present law, in addition to any compensation that may be provided under the present law provisions described above, the commissioner of revenue may provide the monetary allowances required to be provided by the state to certified service providers and volunteer sellers pursuant to Article VI of the Streamlined Sales and Use Tax Agreement as it may be amended from time to time. Such monetary allowances must be in the form of vendor's compensation allowances that certified service providers or volunteer sellers are permitted to retain from sales and use taxes due that are to be collected and remitted to this state on sales of the volunteer seller in this state. This bill revises the above present law provisions, as follows: (1) This bill removes all of the provisions regarding Model 1 sellers under the Streamlined Sales and Use Tax Agreement; (2) This bill specifies that the deduction provided for in present law will apply to all dealers. A "dealer" is defined under present law as every person, including Model 1, Model 2, and Model 3 sellers, who engage in certain activities listed in present law such as manufacturing or producing tangible personal property for sale at retail, for use, consumption, distribution, or for storage to be used or consumed in this state; selling at retail, or offering for sale at retail, or possessing for sale at retail, or for use, consumption, distribution, or storage to be used or consumed in this state, tangible personal property; or engages in the regular or systematic solicitation of a consumer market in this state by the distribution of catalogs, periodicals, advertising fliers, or other advertising, or by means of print, radio or television media, by telegraphy, telephone, computer data base, cable, optic, microwave, or other communication system; and (3) Limits the deduction to a maximum of $25.00 per report. This limit would not apply to an out-of-state person who makes sales in Tennessee who is not required to register for sales and use tax but still voluntarily registers to collect and remit the tax. Under this bill, an amount equal to the excess of the amount calculated by the formula provided under present law, over and above the $25.00 limit, would be deposited in the general fund.

Statutes affected:
Introduced: 4-29-246(a), 4-29-246, 4-29-250(a), 4-29-250